By Emon Reiser

Shares of BorgWarner were on the rise after the auto supplies maker signed an agreement marking its entry into the booming data center market.

The stock climbed 20.9% to $65.31 a share midday Wednesday, on track to close at an all-time high with its largest percentage increase since October 2008. Year to date, shares are up 44.5%.

BorgWarner on Wednesday announced that it has signed a master supply agreement with TurboCell, a subsidiary of data center infrastructure developer Endeavor, to supply modular turbine-generator systems for fueling artificial intelligence-driven demand.

"The power-generation market is expected to grow significantly over the next decade. We expect roughly a mid-teens annual growth in demand for onsite power generation through 2035," Chief Executive Joseph Fadool said on a call with analysts. "This is where we expect our turbine generator system to be a transformative solution for the data center market, as we believe our product addresses the growing demand for alternatives to traditional onsite power generation."

Production is expected to ramp up in 2027, with more than $300 million in sales anticipated in the first year of production. BorgWarner's new modular turbine product is seen as applicable to 90% of data centers globally, including for both primary and back-up power, Baird Equity Research analysts wrote in a note.

"Strategically, management sees this offering as an alternative to traditional on-site power generation, with flexibility to accommodate for multiple fuel types (natural gas, propane, diesel, hydrogen) and an expected superior emissions footprint as compared to current technologies," Baird analysts wrote in a note.

As BorgWarner moves into data center generators, Baird analysts see upward pressure on the company's valuation and reduced focus around its core auto franchise model, where near-term growth is limited.

BorgWarner on Wednesday reported its fourth-quarter results ahead of the market open, posting a loss of $262 million, or $1.23 a share, compared with a loss of $403 million or $1.84 a share, in the year-ago quarter.

Adjusting for one-time items, the company reported $1.35 in earnings per share, beating the $1.19 adjusted earnings per share analysts polled by FactSet had expected.

Net sales for the fourth quarter rose 4% to $3.57 billion. Analysts had expected $3.53 billion.

BorgWarner guided for full-year sales between $14 billion and $14.3 billion, compared with 2025 sales of $14.3 billion, as the company anticipates a decline in its battery and charging systems segment, and that its weighted light vehicle markets will be down 3% to approximately flat.

Write to Emon Reiser at emon.reiser@wsj.com

(END) Dow Jones Newswires

February 11, 2026 12:31 ET (17:31 GMT)

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